S'agapaw is the "original" form of the verb. S'agapw is the result of a linguistic phenomenon known as Synaeresis. In modern greek both forms are used interchangeably, generally without people even noticing the difference. However the contracted form might be considered less appropriate in some literary contexts.

I specifically remember a greek sit-com, where a gay male character advised a straight male character against saying "S'agapw" to the latter's former girlfriend as he considered it bad flirting practice.